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Supreme Court asked to block Chrysler bankruptcy sale

[JURIST] Two groups of petitioners filed an emergency request with the US Supreme Court [official website] Saturday to stop the sale of Chrysler Group [corporate website] assets to Italian automaker Fiat [corporate website]. The first group, consisting of three Indiana state pension and construction funds - the Indiana State Police Pension Fund, the Indiana Teacher's Retirement Fund and the state's Major Moves Construction Fund - claims that the terms of the sale favor unsecured stockholders at the expense of secured stockholders and alleged that the use of Trouble Asset Relief Program Funds (TARP) [official website] to finance the bankruptcy is unconstitutional. The second group, consisting of individuals with products liability claims against Chrysler, claims that the terms of the sale would limit their ability to recover for products liability actions. Justice Ruth Bader Ginsburg has the authority to issue or reject a stay herself [CNN report] or refer the application to the full court.

On Friday, the US Court of Appeals for the Second Circuit [official website] approved the sale [JURIST report] of most of the assets of Chrysler Group to Fiat, but said the deal could not be completed until June 8 or until the Supreme Court declines to hear an appeal. The ruling upheld a previous decision [opinion, PDF; JURIST report] by the US Bankruptcy Court for the Second District of New York.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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